Business Development Bank of Canada Act (S.C. 1995, c. 28)

Short Title

Marginal note:Short title

1 This Act may be cited as the Business Development Bank of Canada Act.

Interpretation

Marginal note:Definitions

2 In this Act,

Bank

Bank means the Business Development Bank of Canada continued by subsection 3(1); (Banque)

bill of lading

bill of lading has the same meaning as in subsection 425(1) of the Bank Act; (connaissement)

Board

Board means the Board of Directors of the Bank; (conseil)

by-law

by-law means a by-law of the Bank; (règlement administratif)

Chairperson

Chairperson means the Chairperson of the Board; (président du conseil)

Crown

Crown means Her Majesty in right of Canada; (Version anglaise seulement)

debt obligation

debt obligation means a bond, debenture, note, investment certificate or other evidence of indebtedness or a guarantee of a corporation, whether secured or unsecured; (titre de créance)

Designated Minister

Designated Minister means such member of the Queen’s Privy Council for Canada as may be designated by the Governor in Council as the Minister for the purposes of this Act; (ministre compétent)

director

director means a member of the Board; (administrateur)

enterprise

enterprise means an organized economic activity carried on by one or more persons; (entreprise)

Executive Committee

Executive Committee[Repealed, 2014, c. 39, s. 211]

goods, wares and merchandise

goods, wares and merchandise has the same meaning as in subsection 425(1) of the Bank Act; (effets, denrées ou marchandises)

joint venture

joint venture means an association of persons, when the relationship among those associated persons does not, under the laws of Canada, constitute a corporation, partnership or trust; (coentreprise)

person

person includes a trust, a partnership, a joint venture and an association of natural persons or corporations; (personne)

President

President means the President of the Bank; (président)

resolution

resolution means a resolution of the Board; (résolution)

securities

securities means the shares of any class or series of shares or the debt obligations of a corporation and includes certificates evidencing those shares or debt obligations; (valeurs mobilières)

subsidiary

subsidiary has the same meaning as in subsection 83(6) of the Financial Administration Act; (filiale)

warehouse receipt

warehouse receipt has the same meaning as in subsection 425(1) of the Bank Act. (récépissé d’entrepôt)

Establishment and Organization of the Bank

Status of the Bank

Marginal note:Continuation of Federal Business Development Bank

• 3 (1) The Federal Business Development Bank established by the Federal Business Development Bank Act is continued as a body corporate under the name “Business Development Bank of Canada”.

• Marginal note:Head office

  (2) The head office of the Bank must be at a place in Canada that the Governor in Council may designate.

• Marginal note:Capacity

  (3) The Bank has, in respect of its powers, all the rights, powers, privileges and capacity of a natural person.

• Marginal note:Agent of the Crown

  (4) The Bank is for all purposes an agent of the Crown.

Purpose

Marginal note:Purpose of Bank

• 4 (1) The purpose of the Bank is to support Canadian entrepreneurship by providing financial and management services and by issuing securities or otherwise raising funds or capital in support of those services.

• Marginal note:Consideration to small and medium-sized enterprises

  (2) In carrying out its activities, the Bank must give particular consideration to the needs of small and medium-sized enterprises.

Board of Directors

Marginal note:Membership of Board

• 5 (1) The Bank has a Board of Directors comprised of the Chairperson, the President and not fewer than three, but no more than 11, other directors.

• Marginal note:Limit on directors from public service

  (2) No more than two of the directors, excluding the Chairperson and President, may be appointed from the federal public administration.

Marginal note:Appointment of Chairperson

• 6 (1) The Chairperson is to be appointed by the Governor in Council to hold office during pleasure for a term that the Governor in Council considers appropriate.

• Marginal note:Absence or incapacity

  (1.1) If the Chairperson is absent or unable to act or the office of Chairperson is vacant, the Board may authorize one of the other directors to act as Chairperson, but that person is not authorized to act as Chairperson for a period of more than 180 days without the approval of the Governor in Council.

• Marginal note:Appointment of President

  (2) Notwithstanding subsection 105(5) of the Financial Administration Act, the President is to be appointed by the Governor in Council to hold office during good behaviour for a term that the Governor in Council considers appropriate and may be removed for cause.

• Marginal note:Reappointment

  (3) The President is eligible for reappointment on the expiration of his or her term of office.

• Marginal note:Appointment of directors

  (4) The other directors are to be appointed by the Designated Minister, with the approval of the Governor in Council, for a term not exceeding four years that will ensure, as far as possible, the expiration in any one year of the terms of office of not more than half of the directors.

• Marginal note:Acting directors

  (5) The Governor in Council may appoint an individual to act as a director if a director is absent or unable to act.

• Marginal note:Eligibility

  (6) No individual is eligible to be appointed or to continue as President, Chairperson or a director if the individual is

  • (a) neither a Canadian citizen nor a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act;

  • (b) a Canadian citizen who is not ordinarily resident in Canada;

  • (c) a permanent resident, within the meaning of subsection 2(1) of the Immigration and Refugee Protection Act, who has been ordinarily resident in Canada for more than one year after first becoming eligible to apply for Canadian citizenship;

  • (d) a member of the Senate or House of Commons or a member of the legislature of a province; or

  • (e) employed in the public service of a province.

Marginal note:Functions of Board

• 7 (1) The Board shall direct and manage the business and affairs of the Bank.

• Marginal note:By-laws

  (2) The Board may, by resolution, make by-laws to regulate the business and affairs of the Bank.

• Marginal note:Committees of Board

  (3) The Board may establish any committee of the Board that it considers advisable and may determine the committee’s composition and duties and the tenure of its members.

• Marginal note:Delegation of powers and specification of duties

  (4) The Board may delegate power to, and specify the duties and authority of, any committee of the Board to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board.

Officers and Employees

Marginal note:Duties of Chairperson

8 The Chairperson shall carry out the duties determined by by-law.

Marginal note:Duties of President

• 9 (1) The President is the chief executive officer of the Bank and has, on behalf of the Board, responsibility for the direction and management of the business and affairs of the Bank with authority to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board or a committee of the Board.

• Marginal note:Absence or incapacity

  (2) If the President is absent or unable to act or the office of President is vacant, the Board may authorize an officer or employee of the Bank to act as President, but that person is not authorized to act as President for a period of more than 180 days without the approval of the Governor in Council.

Marginal note:Officers and employees

10 The Bank may employ the officers and employees, and may hire the agents or mandataries, advisers and consultants, it considers necessary to carry out the purpose of this Act and for the proper conduct of its business and the Bank may fix the terms and conditions of their employment or hiring.

Marginal note:Delegation of powers and specification of duties

11 The Board may delegate power to, and specify the duties and authority of, any officer, employee or agent or mandatary of the Bank to act in all matters that are not by this Act or any by-law or resolution specifically reserved to be done by the Board or a committee of the Board.

Marginal note:Confidentiality

12 All directors, officers and employees of the Bank or of any subsidiary, and all agents or mandataries, advisers and consultants whose services are engaged by the Bank or any subsidiary, must, before commencing their duties, take an oath or make a solemn affirmation of office and confidentiality in the form set out in the schedule before a commissioner of oaths or other person having authority to administer the oath or solemn affirmation in the place where it is taken or made.

Remuneration and Benefits

Marginal note:Remuneration of directors

• 13 (1) The Chairperson and each director, except the President and any director employed in the federal public administration, are entitled to be paid by the Bank the remuneration fixed by the Governor in Council for their time to attend meetings of the Board or any committee of the Board and to perform their duties under this Act.

• Marginal note:Remuneration of President

  (2) The President is entitled to be paid by the Bank the remuneration fixed by the Governor in Council.

• Marginal note:Expenses of directors

  (3) Directors are entitled to be paid by the Bank reasonable travel and living expenses incurred in connection with the performance of their duties under this Act while absent from their ordinary places of residence.

• Marginal note:Other remuneration and expenses

  (4) Officers, employees, agents or mandataries, advisers and consultants are entitled to be paid by the Bank the remuneration, expenses and benefits that the Bank may determine.

• Marginal note:Pension fund

  (5) The Board may make by-laws respecting

  • (a) the establishment, management and administration of a pension fund for the officers and employees of the Bank and their dependants;

  • (b) the contributions to be made to the fund by the Bank;

  • (c) the provision of benefits under the fund;

  • (d) the payment of pensions; and

  • (e) the investment of the money of the fund.

Specific Powers of the Bank

Financial Services

Marginal note:Loans, investments, etc.

• 14 (1) The Bank may

  • (a) make loans to, or investments in, any person;

  • (b) give guarantees in relation to any person; or

  • (c) extend credit or provide liquidity to, or in relation to, any person through a category of transactions that is prescribed by the regulations.

• Marginal note:How services may be provided

  (2) The services referred to in subsection (1) may be

  • (a) provided directly;

  • (b) provided through arrangements with other persons; or

  • (c) provided by the Bank as a member of a financing syndicate.

• Marginal note:Criteria for making loans, etc.

  (3) The loans, investments and guarantees may be made or given only where, in the opinion of the Board or any committee or officer designated by the Board,

  • (a) the person is engaged, or is about to engage, in an enterprise in Canada;

  • (b) the amount invested, or to be invested, in the enterprise by persons other than the Bank and the character of the investment are such that the Bank may reasonably expect that those persons will have a continuing commitment to the enterprise; and

  • (c) the enterprise may reasonably be expected to prove successful.

• Marginal note:Enterprises outside Canada  — loans and guarantees

  (4) Despite paragraph (3)(a), loans may be made to, or guarantees given in relation to, a person that is engaged or about to be engaged in an enterprise outside Canada if

  • (a) the person is a corporation, trust, partnership or joint venture in which at least one third of the voting interests are held by Canadians or is an association of natural persons or corporations of which at least half the members are Canadians; and

  • (b) at least one of the Canadians referred to in paragraph (a) is also engaged or about to be engaged in an enterprise in Canada.

• Marginal note:Enterprises outside Canada — investments

  (5) Despite paragraph (3)(a), investments may be made in a person that is engaged or about to be engaged in an enterprise outside Canada if

  • (a) the person meets the requirements set out in paragraphs (4)(a) and (b); and

  • (b) the investment is of a category prescribed by the regulations.

• Marginal note:Funds outside Canada — investments

  (6) Despite paragraph (3)(a), investments may be made in a person outside Canada if, in the opinion of the Board or any committee or officer designated by the Board,

  • (a) the person is an investment fund or other investment vehicle of which at least one half of the investment managers reside in Canada; and

  • (b) that fund or vehicle has an investment strategy that reflects an ongoing commitment to invest in Canada.

• Marginal note:Limitation

  (7) Paragraph (3)(b) does not apply

  • (a) to a person that is a trust, a corporation as defined in subsection 2(1) of the Canada Not-for-profit Corporations Act or a corporation incorporated under a provincial statute equivalent to that Act; or

  • (b) in the case where a loan, investment or guarantee is made or given through an arrangement referred to in paragraph (2)(b).

• Marginal note:Complementary to other services

  (8) The services referred to in subsection (1) are to fill out or complete services available from commercial financial institutions.

• Marginal note:Acquiring and dealing with property

  (9) In any circumstances in which the Bank may provide a service to a person under this section, the Bank may

  • (a) purchase or otherwise acquire real or personal property or immovables or movables including accounts receivable; and

  • (b) subject to any right of redemption that may exist, hold, lease to the person or subsequently sell, dispose of or otherwise deal with the property or immovables or movables.

• Marginal note:Definitions

  (10) The following definitions apply in this section.

  Canadian

  Canadian has the same meaning as in paragraph (a), (b) or (d) of the definition Canadian in section 3 of the Investment Canada Act. (Canadien)

  voting interest

  voting interest

  • (a) with respect to a corporation with share capital, means a voting share;

  • (b) with respect to a corporation without share capital, means an ownership interest in the assets of the corporation that entitles the owner to rights similar to those enjoyed by the owner of a voting share; and

  • (c) with respect to a partnership, trust or joint venture, means an ownership interest in the assets of the partnership, trust or joint venture that entitles the owner to receive a share of the profits and to share in the assets on dissolution. (intérêt avec droit de vote)

Marginal note:Security

• 15 (1) The Bank may

  • (a) acquire and hold security or a security interest, including, in Quebec, a right in a security, of any kind and in any form for the due discharge of obligations under a loan, investment, guarantee or agreement that it makes or gives;

  • (b) surrender the security, security interest or right in the security and acquire and hold, in exchange, security or a security interest, including, in Quebec, a right in a security, of any kind and in any form;

  • (c) realize the security, security interest or right in the security made, acquired or held by it on the loan, investment, guarantee or agreement; and

  • (d) exchange, lease, sell, assign, convey or otherwise dispose of the loan, investment, guarantee, agreement, security, security interest or right in a security.

• Marginal note:Additional security

  (2) Without limiting the generality of the powers of the Bank under this section, the Bank may, for the due discharge of the obligations referred to in paragraph (1)(a),

  • (a) acquire and hold a warehouse receipt or bill of lading as security; or

  • (b) take security on goods, wares and merchandise in the same form and manner as security on such property may be taken by a bank under section 427 of the Bank Act.

• Marginal note:Warehouse receipts and bills of lading

  (3) Where the Bank acquires and holds a warehouse receipt or bill of lading as security, subsections 428(1), (2), (7), (8), (9) and (12) and 435(2) and section 436 of the Bank Act apply, with any modifications that the circumstances require, as if the Bank were a bank under that Act.

• Marginal note:Goods, wares and merchandise

  (4) Where the Bank takes security on goods, wares and merchandise, section 427 and subsections 428(1), (2), (7), (8), (9) and (12) of the Bank Act apply, with any modifications that the circumstances require, as if the Bank were a bank under that Act.

• Marginal note:Deemed loan or advance

  (5) Where the Bank issues a guarantee or otherwise makes a promise to effect a payment, the Bank is deemed to lend money or make an advance for the purposes of subsections (3) and (4) and the provisions of the Bank Act that they refer to.

Marginal note:Acquisition of loans

16 The Bank may acquire and deal with as its own any loan, investment or guarantee made or given by another person if

• (a) the loan, investment or guarantee would meet the Bank’s eligibility criteria in subsection 14(3); or

• (b) it is part of a block of loans, investments or guarantees the majority of which meet those criteria.

Management Services

Marginal note:Agreements

• 17 (1) The Bank may provide, or enter into agreements for the provision of, any of the following services:

  • (a) consulting;

  • (b) management training and mentoring;

  • (c) networking, referral and sourcing;

  • (d) information and research;

  • (e) any other management services prescribed by the regulations.

• Marginal note:Complementary to service providers

  (2) The services are to fill out or complete services available from private sector service providers.

Treasury Activities

Marginal note:Borrowing powers

• 18 (1) The Bank may borrow money by any means, including issuing, selling, pledging or hypothecating debt obligations of the Bank.

• Marginal note:Debt obligations

  (2) The debt obligations may, in accordance with their terms, be subordinated to secured or unsecured indebtedness of the Bank and liability under them may be limited to the remaining assets of the Bank, after payment of indebtedness ranking prior to the debt obligations.

• Marginal note:Investment powers

  (3) The Bank may invest any money administered by it

  • (a) in debentures, bonds, stocks, bankers’ acceptances or other securities of or guaranteed by any member of the Canadian Payments Association, or the government of Canada or a province; or

  • (b) in any other manner that the Minister of Finance may approve.

• Marginal note:Financial management

  (4) The Bank may enter into any transaction for the purpose of reducing risk in the financial management of the Bank, including any financial instrument or agreement whose object is the management of financial risks, such as interest rate or currency exchange agreements, options, futures contracts and any other similar agreements.

• Marginal note:Securities

  (5) The Bank may pledge or hypothecate any of its assets or give deposits as security for any debt obligations issued by the Bank or as security for the due performance of its obligations under any financial management agreement.

• Marginal note:Non-application of certain provisions

  (6) For greater certainty, this section has effect notwithstanding sections 100 and 101 of the Financial Administration Act.

Marginal note:Loans to the Bank from Consolidated Revenue Fund

19 At the request of the Bank, the Minister of Finance may, out of the Consolidated Revenue Fund, lend money to the Bank on any terms and conditions that the Minister of Finance may fix.

Agreements and Programs

Marginal note:Agreements

20 The Bank may enter into agreements with, and act as agent or mandatary for, any department or agency of the government of Canada or a province, or any other body or person, for the provision of services or programs to, by, on behalf of or jointly with that body or person and, subject to subsection 14(3), may deliver financial assistance on their behalf under the agreement.

Marginal note:Entrepreneur-ship programs

21 The Bank may carry out duties or functions that may be assigned to it by the Designated Minister in relation to the administration of any program supporting Canadian entrepreneurship, to the extent that it is able to recover the costs of carrying out the duties or functions.

Ancillary Powers

Marginal note:Powers

22 The Bank may

• (a) accept deposits as security for the due performance of any arrangement or agreement with the Bank;

• (b) determine and charge interest and any other form of compensation for services provided by the Bank in the exercise of its powers under this Act;

• (c) procure the incorporation, dissolution or amalgamation of subsidiaries and acquire or dispose of any shares in them;

• (d) acquire and dispose of any interest or right in any entity by any means;

• (e) acquire, hold, exchange, lease, sell or otherwise dispose of any interest or right in real or personal property or immovables or movables and retain and use the proceeds of disposition; and

• (f) generally, do all other things that are incidental or conducive to attaining the purpose of this Act and the exercise of the powers of the Bank.

Capital of the Bank

Marginal note:Authorized capital

• 23 (1) The authorized capital of the Bank consists of an unlimited number of common shares with a par value of $100 each and an unlimited number of preferred shares without par value, but the paid-in capital of the Bank, together with any contributed surplus relating to it and any proceeds referred to in paragraph 30(2)(d) that have been prescribed as equity, must not at any time exceed

  • (a) for the period beginning on the day on which this subsection comes into force and ending on September 30, 2020, the amount that the Minister of Finance determines during that period, or, if that Minister redetermines the amount during that period, the most recently determined amount; and

  • (b) on and after October 1, 2020, an amount equal to the amount determined by the Minister of Finance under paragraph (a), or, if that Minister redetermined the amount under that paragraph, an amount equal to the last amount so determined.

• Marginal note:Publication in Canada Gazette

  (1.1) As soon as feasible after determining or redetermining an amount under paragraph (1)(a), the Minister of Finance shall publish a notice of that amount in the Canada Gazette.

• Marginal note:Issuance of shares

  (2) The shares of the Bank may be issued only to the Designated Minister to be held in trust for the Crown.

• Marginal note:Subscription by Designated Minister

  (3) Where the Board recommends that the Designated Minister subscribe for unissued shares of the Bank, the Designated Minister may, if the Minister of Finance concurs, subscribe for the amount that the Designated Minister considers desirable.

• Marginal note:Payment out of Consolidated Revenue Fund

  (4) The amount of the subscription is to be paid to the Bank out of the Consolidated Revenue Fund at any time and in any amount that the Board may require.

Marginal note:Rights of common shares

• 24 (1) The rights conferred by common shares include

  • (a) the right to vote at any meeting of shareholders;

  • (b) the right to receive dividends declared on common shares; and

  • (c) the right to receive the remaining property of the Bank on dissolution.

• Marginal note:Rights of preferred shares

  (2) The rights conferred by preferred shares of any class or series are limited as follows:

  • (a) the holders of preferred shares are not entitled to vote at meetings of shareholders;

  • (b) dividends, once declared, are limited to the rate, whether fixed or variable, cumulative or non-cumulative, that may be provided for in the by-laws; and

  • (c) participation in the remaining property of the Bank on dissolution is limited to the consideration paid for the shares plus any dividend accumulated or declared and unpaid, but no more.

Marginal note:Declaration and payment of dividends

• 25 (1) In any financial year of the Bank, it may declare and pay to the shareholders of the Bank any dividends out of the retained earnings or surplus account of the Bank.

• Marginal note:Limitation

  (2) The Bank may not declare or pay a dividend if there are reasonable grounds for believing that

  • (a) the Bank is, or would after the payment be, unable to pay its liabilities as they become due; or

  • (b) the realizable value of the Bank’s assets would, after the payment, be less than the aggregate of its liabilities and paid-up capital of all classes.

• Marginal note:Participation in dividends

  (3) If any cumulative dividends or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and the return of capital.

Marginal note:Cancellation or restoration of shares

26 Shares, or fractions of them, of any class or series of shares issued by the Bank and purchased, redeemed or otherwise acquired by it must be cancelled or, if the number of them is limited and the by-laws so authorize, they may be restored to the status of authorized but unissued shares of that class or series.

Marginal note:By-laws relating to shares

27 Subject to the approval of the Governor in Council on the recommendation of the Minister of Finance, the Board may make by-laws

• (a) setting out the rights, privileges, restrictions and conditions attaching to preferred shares, creating one or more additional classes of preferred shares and generally determining the rights and obligations of the holders of preferred shares, including

  • (i) limiting the right of the shareholders to specific dividends or repayments, whether fixed or variable,

  • (ii) authorizing the purchase or redemption of the shares by the Bank, either at the Bank’s option or at the shareholder’s request, and

  • (iii) limiting or extending the rights of the shareholders in any other way;

• (b) authorizing the issue of any class of shares in one or more series and authorizing the Board to fix, by resolution, the maximum number of shares in each series and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to any limitations set out in the by-law;

• (c) determining a maximum number of shares with respect to any class or series of preferred shares;

• (d) changing authorized shares without par value, whether issued or not, into shares with a par value and changing authorized shares with a par value, whether issued or not, into shares without par value;

• (e) consolidating or subdividing shares;

• (f) converting shares of any class into shares of another class; and

• (g) increasing or reducing the issued share capital or any part of it, with or without distribution of paid-in capital or reduction of liability on any of the shares.

Marginal note:Hybrid capital instruments

• 28 (1) With the approval of the Governor in Council on the recommendation of the Minister of Finance, the Bank may issue to persons other than the Crown hybrid capital instruments prescribed, in whole or in part, as equity of the Bank under paragraph 30(2)(d).

• Marginal note:Crown not liable

  (2) The Crown is not in any way liable for payment of amounts owing under an instrument issued under subsection (1).

• Marginal note:Instruments not shares

  (3) For greater certainty, an instrument issued under subsection (1) is not a share within the meaning of Part X of the Financial Administration Act.

Marginal note:Appropriations

29 Moneys may be appropriated by Parliament and paid out to the Bank for use in any of its activities.

Debt-to-equity Ratio

Marginal note:Limit on borrowings and guarantees

• 30 (1) The aggregate of

  • (a) the borrowings of the Bank under subsection 18(1) and section 19, and

  • (b) the contingent liabilities of the Bank in the form of guarantees given by it

  must not at any time exceed twelve times the equity of the Bank.

• Marginal note:Definition of equity

  (2) For the purpose of subsection (1), the equity of the Bank consists of

  • (a) the amounts paid for its shares, including any contributed surplus;

  • (b) the retained earnings of the Bank, which may be positive or negative;

  • (c) amounts paid to the Bank as capital by Parliamentary appropriation; and

  • (d) such proceeds of debt instruments, hybrid capital instruments or other arrangements as may be prescribed as equity by the Governor in Council.

Conflict of Interest

Marginal note:Definitions

31 In section 33,

applicant

applicant means a person who applies to the Bank for assistance in the form of a loan, investment, guarantee, purchase or lease; (demandeur)

interested person

interested person means

• (a) the spouse, common-law partner within the meaning of section 2 of the Bank Act, child, brother, sister or parent of a director,

• (b) the spouse, or the common-law partner within the meaning of section 2 of the Bank Act, of a child, brother, sister or parent of a director, or

• (c) the parent, sister or brother of the spouse, or of the common-law partner within the meaning of section 2 of the Bank Act, of a director. (personne intéressée)

Marginal note:Restriction

32 The Bank shall not grant a loan, investment or guarantee to a director or officer of the Bank.

Marginal note:Disclosure

• 33 (1) An applicant must disclose in writing to the Bank whether the applicant is an interested person or, if the applicant is a firm or corporation, whether a partner of the firm or a shareholder, director or officer of the corporation is an interested person or a director or officer of the Bank.

• Marginal note:Submission of application to Board for approval

  (2) If the applicant discloses that the applicant is an interested person, or that a partner, shareholder, director or officer is an interested person or a director or an officer of the Bank, the application must be submitted to the Board for approval before the Bank enters into an agreement to provide the assistance.

• Marginal note:Director must not be at meeting or vote

  (3) A director must not be present at a meeting of the Board when the Board is considering an application, or vote on a resolution relating to it, if the applicant is

  • (a) a person related to the director as described in paragraph (a), (b) or (c) of the definition interested person in section 31; or

  • (b) a firm or corporation of which the director, or a person referred to in paragraph (a), is a partner, shareholder, director or officer.

• Marginal note:Annual report

  (4) The amount of each agreement referred to in this section and the name of the person, firm or corporation with whom the agreement is entered into must be included in the annual report that the Bank is required to submit under subsection 150(1) of the Financial Administration Act.

Miscellaneous Provisions

Marginal note:Financial year

34 Notwithstanding section 121 of the Financial Administration Act, the financial year of the Bank is the period of twelve months beginning on April 1 and ending on the next March 31, unless the Governor in Council directs otherwise.

Marginal note:Exemption from taxes

35 The Bank is exempt from taxes imposed by the Income Tax Act.

Marginal note:Ten-year review

• 36 (1) Five years after this Act comes into force, and every ten years afterward, the Designated Minister must have a review of the provisions and operation of this Act undertaken in consultation with the Minister of Finance.

• Marginal note:Report to Parliament

  (2) Within one year after the review is undertaken, the Designated Minister must submit to Parliament a report on the review.

• Marginal note:Review of report

  (3) The report must be reviewed by any committee of the Senate or of the House of Commons, or any joint committee, that may be designated or established for the purpose of reviewing the report.

Marginal note:Privileged information

• 37 (1) Subject to subsection (2), all information obtained by the Bank or by a subsidiary in relation to its customers is privileged and a director, officer, employee or agent or mandatary of, or adviser or consultant to, the Bank or a subsidiary must not knowingly communicate, disclose or make available the information, or permit it to be communicated, disclosed or made available.

• Marginal note:Authorized disclosure

  (2) Privileged information may be communicated, disclosed or made available

  • (a) for the purpose of the administration or enforcement of this Act and legal proceedings related to it;

  • (b) for the purpose of prosecuting an offence under this Act or any other Act of Parliament;

  • (c) to the Minister of National Revenue solely for the purpose of administering or enforcing the Income Tax Act or the Excise Tax Act; or

  • (d) with the written consent of the person to whom the information relates.

Marginal note:Use of Bank’s names or initials

38 Except with the consent in writing of the Bank, a person must not in any prospectus or advertisement, or for any other business purpose, use the name of the Bank or any of the following names or initials: “Federal Business Development Bank”, “Banque fédérale de développement”, “Industrial Development Bank”, “Banque d’expansion industrielle”, “B.D. Canada”, “B.D.C.”, “B.D.B.C.”, “B.F.D.” or “F.B.D.B.”.

Marginal note:Offence

39 A person who contravenes section 37 or 38 is guilty of an offence and liable on summary conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding six months, or to both.

Marginal note:Regulations

40 The Governor in Council may make regulations

• (a) defining hybrid capital instrument; and

• (b) prescribing anything that by this Act is to be prescribed.

Repeal

41 [Repeal]

Transitional Provisions

Marginal note:Continuation of Federal Business Development Bank

• 42 (1) The Bank continues for all purposes the existence of the Federal Business Development Bank established by the Federal Business Development Bank Act.

• Marginal note:Rights preserved

  (2) Without limiting the generality of subsection (1),

  • (a) the property of the Federal Business Development Bank continues to be the property of the Bank;

  • (b) the Bank continues to be liable for the obligations of the Federal Business Development Bank;

  • (c) an existing cause of action, claim or liability to prosecution relating to the Federal Business Development Bank is unaffected;

  • (d) a civil, criminal or administrative action or proceeding pending by or against the Federal Business Development Bank may be continued to be prosecuted by or against the Bank; and

  • (e) a conviction against, or ruling, order or judgment in favour of or against, the Federal Business Development Bank may be enforced by or against the Bank.

Marginal note:Capital vests in Bank

• 43 (1) The capital paid in by Canada with respect to the Federal Business Development Bank as of the coming into force of this Act is vested in the Bank as its paid-in capital and is converted into common shares of the Bank on the basis of one fully paid common share for each $100 of paid-in capital.

• Definition of capital

  (2) The capital vested in the Bank by subsection (1) includes

  • (a) amounts referred to in paragraph 28(1)(a) of the Federal Business Development Bank Act;

  • (b) amounts paid in under subsection 28(1) of that Act; and

  • (c) amounts paid in as capital by Parliamentary appropriation.

Consequential Amendments

44 to 55 [Amendments]